Even as the Reserve Bank of India (RBI) is yet to decide on the proposed merger of Bank of Rajasthan (BoR) with ICICI Bank, the employees? union of BoR, Akhil Bharatiya BoR Karamchari Sangh, has filed a writ petition against the BoR in the Rajasthan High Court over merger issue.
The union is seeking to stay the proposed merger of the bank through the petition. Based on the petition, the High Court of Rajasthan has issued notices to all respondents including the government, RBI, Sebi, BoR, ICICI Bank, BoR promoters PK Tayal and SK Tayal for their replies, which are supposed to be submitted by August 4.
Earlier, a lower court in Kolkata had given a stay order on the EGM to ratify the proposed merger and BoR top executives had to walk out from the EGM. However, some shareholders who had continued with the EGM had approved the merger.
Later on the same day, when the EGM was held Calcutta High Court had revoked the stay order of the lower court. Facing such a situation BoR management couldn’t take a final decision and had asked RBI’s intervention to decide on the the proposed merger . Meanwhile, the delay in the merger process has somehow hit the BoR’s business. Bank’s total balance sheet size including deposits and assets has shrunk by 13%. The balance sheet size stood around Rs 23,000 crore as on March 31, 2010. The bank, according to a source, has also stopped taking bulk deposits, typically in the size of 200-100 crore. ?There is no point of taking bulk deposits if the bank is not able to deploy the funds,? said the sources.
Meanwhile, 10-15 Bank of Rajasthan employees have already taken VRS. The top 17-20 executives of BoR seem to be undecided about their continuance in the merged entity.
?If there is no down-gradation of their portfolios and they get due recognition from ICICI bank, they have expressed willingness to continue with the bank. Their services will be required initially to integrate and absorb the BoR’s network into ICICI,? sources said.